Old Works Golf Course seeks long-term solution to revenue woes

Susan Dunlap, The Montana Standard

A dog stands at attention in front of the Old Works Golf Course sign, which greets visitors as they drive up to the Jack Nicklaus-signature course. In the background is Stucky Ridge, where a fervent storm last summer caused extensive flooding of debris and contaminated sediment to wash down and cause considerable damage to the golf course, which led Old Works to lose money. The golf course authority board is requesting a 10-year subsidy from Atlantic Richfield to stabilize financially.

Walter Hinick, The Montana Standard

Hall of Fame golfer Jack Nicklaus takes in the nice weather while touring Old Works Golf Course last year in Anaconda. Nicklaus designed the course 20 years ago and helped celebrate last year's 20th anniversary by making an appearance.

Al Balderas, The Montana Standard

Jack Nicklaus, right, helps Anaconda's Carter Morley with his body position while at the Old Works Golf Course driving range last year during Nicklaus' 20th anniversary visit.

Al Balderas, The Montana Standard

Remnants of the old Washoe Smelter add to the beauty of Old Works Golf Course, pictured here in 2016.

After a tough year, officials with Old Works Golf Course asked Atlantic Richfield Company for a 10-year subsidy equaling $6.9 million along with debt relief of approximately $1 million last week.

Old Works Golf Authority Board sent the 10-year plan, which projects annual subsidy needs for each year, to Atlantic Richfield Company. The company, now part of the oil giant BP, is responsible for Anaconda's more than 300-square-mile Superfund site due to nearly 100 years of smelter emissions. Atlantic Richfield has not responded yet to the request.

The Jack Nicklaus-designed course suffered a difficult season last year caused by an extraordinary flood that sent three-quarters of an inch of water into town in 22 minutes last July. Sediment, bricks, and debris washed down Stucky Ridge, which has not been reclaimed, and poured out over two-thirds of the course, Anaconda-Deer Lodge County Superfund Coordinator Carl Nyman said last week.

That temporarily closed the golf course and caused extensive damage. Old Works Golf Course, named after the first copper smelter in Anaconda, lost an estimated 1,500 rounds of golf, Nyman said.

"That's the equivalent to 1,500 visits to the golf course and the community," Nyman explained.

On top of that, Montana had one of its worst wildfire seasons, which strained the state's budget and left residents throughout southwest Montana with compromised air quality for weeks on end.

Atlantic Richfield built Old Works Golf Course in the 1990s as a solution to some of Anaconda's Superfund woes. It acts as a complex cap to control storm water contaminated mostly with arsenic.

But it was also meant to act as a draw to the Smelter City and, therefore, as a boost to a town that hit the economic stop button 37 years ago when the Washoe Smelter shut down operations. The smelter, owned by Atlantic Richfield, smelted Butte's raw copper ore.

The course isn't just any ordinary set of fairways and greens. It's a Jack Nicklaus signature course, designed by the legendary golfer himself. Old Works has been ranked highly as a top-notch public golf course over the years.

More than 90 percent of the golfers it attracts come from elsewhere. That means money spent in the community on lodging, restaurants, and other places.

But the golfers in Anaconda aren't enough — only 8 percent of revenue — to keep the course open, said Mike King, chair of Old Works Golf Course Authority Board.

To keep the course in the kind of shape it needs to be in to attract golfers passionate enough to travel long distances for the sport, it needs to remain top notch. And that costs money, King said.

How the money would be spent

The costs projected as necessary are spaced out over 10 years. The first year, the ask is for things such as carpet estimated to cost $18,000, tile estimated to cost $12,235, and an oven and freezer at $10,000. Equipment purchases for golf course maintenance are estimated to cost $605,904.

The total request for the first year is $829,751.

But not every year is expected to be that heavily subsidized. Year 4 is projected to require $90,977 in subsidies from Atlantic Richfield.

How the subsidy would work exactly — if Atlantic Richfield would pay out quarterly, bi-annually, or annually — is a question the golf authority board will have to work out with the company, assuming the company agrees to the deal.

If Atlantic Richfield proves amenable to the concept and final terms are hashed out, both the golf authority board and the Anaconda-Deer Lodge County of Commissioners will have a say by voting on the proposal.

King said he anticipates a meeting with Atlantic Richfield sometime in March to discuss the plan.

Houston-based Atlantic Richfield spokesperson Brett Clanton said via email that the company is "working with the Old Works Golf Course Authority Board and Anaconda-Deer Lodge County to complete repairs of areas damaged by the flood event during July 2017, and to review proposed plans for the golf course in the future. Atlantic Richfield Company is evaluating information provided to it, and has no further comments at this time."

But everyone The Montana Standard spoke to expressed optimism over this new approach to solve the golf course's problems. Nyman said he saw a real team effort on the part of the county and Atlantic Richfield as they came together to solve the issues around last summer's flood. The company paid for "almost everything" the county asked for to deal with the considerable repair work needed and provided a financial subsidy of $460,000 to the golf course to compensate Old Works for the lost rounds of golf, Nyman said.

Everett said the cost to the community for the lost rounds has not been calculated. But if the 10-year subsidy is agreed to, this could make the golf course's future a whole lot brighter.

"We're trying to run it smoothly and be feasible. We're trying to find long-term stability," Everett said.

What's the problem?

The problem isn't Montana's short summer season, the wildfire smoke that now eats up a portion of that already short season, or the difficulties of drawing visitors to spend time in a Superfund site.

It's golf itself, Everett said.

"Overall trends in golf courses have been in decline each year," Everett said. "Are we different from anybody else? It seems to be a similar trend, both in the Northwest and across the U.S."

Even the golf equipment industry is struggling. A 2015 report that came out on TaylorMade, a golf equipment brand of Adidas, indicated sales slumped for three years in a row. Other golf equipment manufacturers have suffered as golf as an amateur sport has gone into significant decline.

Old Works has suffered, too. The golf course barely broke even until 2007, and after that year, it began to lose money. About four years ago, Old Works nearly closed because it struggled to meet payroll. For the last few years, the course has been living on a borrowed dime — Atlantic Richfield's. The county has repeatedly taken out loans with the company since 2012 to keep the course afloat and now owes around $1 million to the former oil giant.

Everett would not comment on the loan forgiveness portion of the 10-year plan. Atlantic Richfield also declined to comment on the loan forgiveness pitch.

But King said Old Works doesn't really owe that money. He said it was always understood that the loans would be forgiven.

"We would never tag our community or our board with debt," he said.

When Everett ran for chief executive in 2016, he campaigned in part on never again taking out loans from Atlantic Richfield for the golf course.

"We don't have the financial capability of carrying those loans, let alone paying them back. Let alone putting the financial responsibility on the taxpayers," Everett said.

An agreement the county reached with Atlantic Richfield in the summer of 2016 provided, among other things, for the loans to be paid back with money the county would receive from Atlantic Richfield. But that agreement was unpopular amongst community members for a host of reasons, led to considerable backlash for county officials, and appears to have been squashed. A new agreement, which would have provided money to the county to cover a variety of issues related to the town designated as a Superfund site, was expected to be unveiled in 2017, but that never happened.

Everett says the new plan, which just focuses on the golf course's needs, is a better approach.

What's next?

Even despite the many ills that beset the golf course, Nyman said a more aggressive marketing effort last year improved revenue at the course. King said that just before the flood, the course was 300 rounds ahead of budget.

Despite the pitfalls, King estimates that the golf course's annual budget is in the neighborhood of $1.2 million. Revenue from Old Works accounts for about 80 percent of that. The hard part is that during the long winter, the course has no revenue stream coming in but still has payroll and other costs.

King said that if Anaconda grows again, it's possible the county would not need Atlantic Richfield's help after this 10-year plan.

But King said it's likely that this would only be the beginning of a long-term solution wherein Atlantic Richfield would need to subsidize the course in perpetuity.